RAKBank and Bank of Sharjah record profits

RAKBank has reported a net profit of Dh729.8 million for the nine months ended September 30, reflecting a 37.50 per cent growth compared to the same period in 2009.

“RAKBank has maintained a robust performance in the nine months of 2010, affirming the bank’s solid business model and prudent banking policies,” said Graham Honeybill, RAKBank General Manager. “With some recovery signs seen in the current economic environment, the bank continues to seek good lending opportunities and remains receptive to market opportunities.”

During the year, the bank’s net interest income grew by 35.5 per cent compared to the previous year to reach Dh1.2 billion. Gross Loans and advances stood at Dh16.2bn, an increase of 16.9 per cent over December 31, 2009, and an increase of 23.4 per cent compared to the same period last year.

Fee, commission and other income grew by 22.9 per cent to Dh459.7m compared to the same period in 2009. Total assets as of September 30 stood at Dh21.6bn, an increase of 25.9 per cent over December 31, 2009, and a 31.6 per cent increase compared to September 30, 2009.

Growth in the asset book was a result of a boost in loans and advances, supported by a combination of increases in shareholders’ equity and customer deposits, which were up by Dh3.9bn to Dh16.8bn from December 31, 2009, from both term and transaction deposits.

During the nine months, RAKBank has taken adequate provisions on its loan portfolio. Despite an increase of Dh43.6m in total impairment charges compared to the same period last year, reaching Dh210.3m as of September 30, the bank is seeing an improvement in trends quarter-on-quarter.

The bank’s advances to deposits ratio comfortably stood at 93.4 per cent as per the UAE Central Bank guidelines. During the nine months period, the bank purchased $53.5m of its own bonds from the market.

Also during the nine months, investments totalling Dh56.3m matured or were disposed of and the bank’s portfolio stood at Dh358.8m by the end of September.

The share capital increased to Dh1,154.4m up from Dh962.0m after distribution of a 20 per cent stock dividend. Total shareholder’s equity stood at Dh3.4bn at the end of the nine months period.

RAKBank’s capital adequacy ratio is well above the requirement of the Central Bank as of September 30 at 19.7 per cent.

Bank of Sharjah (BoS) results revealed consistent performance for the period ending September 30. It recorded marginal one per cent increase in net income during the current period, which reached Dh393m versus Dh388m for the same corresponding period of 2009, according to WAM.

The growth is attributed to the bank's proven strategy, the quality of its assets, and the strength of its balance sheet.

As of September 30, 2010, total assets reached Dh20,095m, an increase of 15 per cent over the corresponding September 30, 2009, figure of Dh17,451m. The increase over the December 31, 2009, figure of Dh18,062m was a significant 11 per cent. This growth was driven by the growth in deposits.

BoS has successfully managed to substantially increase its deposits portfolio. Total deposits reached Dh13,709m as of September 30. A significant 19 per cent increase over the corresponding September 30, 2009, figure of Dh11,561m, revealing customers' confidence in the institution. Also, when compared to the December 31, 2009, figure of Dh12,113m, the increase in deposits was a prominent 13 per cent.

The bank's loans and advances reached Dh12,107m for the period, an increase of nine per cent over the corresponding September 30, 2009, figure of Dh11,071m. The increase over the December 31, 2009, figure of Dh11,450m was six per cent.

The significant increase in deposits over the loans and advances lead to improvement to the loans and advances to deposits ratio which fell from a high of 0.96 in September 2009 to 0.88 as of September 2010.

The bank's equity grew by five per cent to reach Dh4,231m compared to the September 30, 2009, figure of Dh4,035m. The increase over the December 31, 2009, figure of Dh4,097m was also a marginal three per cent.

Net liquidity for the period stood at Dh3,874m, in comparison to the corresponding September 30, 2009, figure of Dh2,834m, a surge of 37 per cent. When compared to the December 31, 2009, figure of Dh2,912m, the increase was also a salient 33 per cent of Dh962m.

Net interest income for the period ending September 30 marginally dropped by four per cent (around Dh16m) to reach Dh414m compared with Dh430m for the corresponding 2009 period.

The drop in net interest income was compensated by the increase in commissions and other income which lead to the four per cent increase in net operating income to Dh544m versus Dh525m for the corresponding 2009 period.

The bank saw a 17 per cent current year decline in total comprehensive income as a result of the Dh3m losses on the available for sale investments portfolio versus a gain of Dh73m in the corresponding September 2009 period.

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